His father built boats as a hobby, and James Hilton developed a passion for watercraft early on. "I've been in all sorts of boats since I was one month old," says Hilton, a financial advisor with UBS. "I love boats and everything about them." Now based in Newport, R.I., Hilton not only sails and races regularly but is also involved in the nearby International Yacht Restoration School and is a past trustee of Sail Newport, a community sailing center.
Not surprisingly, boatingspecifically yachtingis a useful passion for a financial advisor to cultivate, considering the affluent crowd that this pastime attracts. Indeed, Hilton says it is often hard to tell the dividing line between work and pleasure, since many of his clients are also part of his yachting world. "We start off with a natural common affinity," he notes of the clients he meets through boating, "and that is a great step in building relationships and trust."
It's standard advice that financial advisors should be involved in activities outside of work to expand their networks and ultimately, their business. Few, though, can claim such a longstanding and fitting pastime as Hilton's, and many have a narrow view of what counts when it comes to developing a new hobby.
"We hear advisors lament all the time that they don't know how to play golf, but that's ludicrous," says Matthew Oechsli, head of a research and consulting firm serving financial advisors. In his view, almost any interestcooking, gardening, wine, triathlons and even medical conditionscan become a platform for meeting new people and prospective clients. The only hard and fast rule is that the interest be genuine. "The worst thing you can do is to contrive a passion, because it will be obvious," he says.
Join the Club
Larry Moss, a financial advisor for Raymond James & Associates based in Birmingham, Mich., took that notion to heart about 30 years ago when he joined some car clubs. While he bought his first sports car in his early 20s, he didn't devote much time to car-related activities at first. But in his mid-30s he decided that he wanted to excel in his career as a financial advisor. "I asked successful advisors what they did to grow their businesses, and they said they joined organizations," he recalls. "Why reinvent the wheel? I joined a country club for golf, and got more involved in the car hobby."
That meant participating in and ultimately leading a variety of local car clubs, as well as helping to run and judge car shows. After many years of involvement with Concours d'Elegance of America's annual car show in Michigan, Moss was recently named chairman of its board of directors as well as event chairman. He also invested in his own collection, which now stands at six cars. His favorite is a 1932 blue Ford hot rod with black fenders that he bought from a famous hot rod racer. After negotiating the sale, the racer asked Moss to take a look at his portfolio and then became a client.
Yet it is hardly a direct line from joining a club that attracts wealthy people to gaining new business from it. It was five years before "even a hint" of business came to him as a result of auto endeavors, and he counts few clients on the car show board, which he now chairs. "Most people who are successful already have advisors, so it takes time for them to get to know you and break those relationships," he explains.
To build enduring connections, he takes a deliberately understated approach to marketing his business through his hobbies. He doesn't initiate discussions about his business to fellow car enthusiasts and rarely carries business cards, preferring to give only subtle hints about his occupation, such as sending out emails from his work account. "If you push yourself too much, that's a turnoff to people with money," he says.
Developing an interest in an activity that wealthy people tend to flock to, as Moss and Hilton have done, is one way to leverage a leisure pastime for business purposes. Another is to engage in an activity that emphasizes certain personal characteristics.
That's how Jeff Runyan, a financial advisor with Wedbush Securities based in Beverly Hills, Calif., feels about his off-hours triathlon training and competitions that he has participated in since he was a teenager. While most of his clients aren't serious athletes, he believes his background highlights his strong work ethic. "Triathlons are an endurance sport and take many hours of training in not one, but three events," he says. "Even if clients don't compete, they are attracted to the idea of the dedication it involves."
That discipline works during business hours, as well, helping him to maintain his focus throughout long days of back-to-back meetings and to stay committed to expanding his network. Even Pilates, which he does as a form of meditation, can benefit his business, Runyan believes. "You don't talk; there's no engagement with others," he says. "Yet I can't say it yields nothing for business, because I believe clients are attracted to people who take care of themselves."
Less intense and perhaps easier to get involved in than athletics are the civic organizations that attract local business leaders. Runyan is involved in several, including the Rotary Club of Beverly Hills, the Malibu Chamber of Commerce and his local homeowners' association. Like Moss, he doesn't solicit business directly but sees results from allowing relationships to develop naturally. A "meaningful percentage" of his business consists of members of the organizations to which he belongs.
PURITY OF MOTIVE
Other organizations, including charities and nonprofits, can also be an important part of network building as long as there is a solid connection between the advisor and the cause. "Maybe your mom had cancer or your cousin has M.S.," Oechsli says. "If you get involved in those research efforts, there's a purity to your motive that will come through." Hilton, for example, supports the Monmouth County ARC program in New Jersey, which assists people with disabilities. He does this in memory of his sister who had Down's syndrome and benefited greatly from the program.
In many cases, though, an advisor needs nothing more than a desire to learn something new and the organizational skills to book an interesting event. "What you really want to do is create a calendar of social interaction with your clients," Oechsli says. For gardening enthusiasts, this can mean linking up with a local nursery for special presentations or demonstrations; for food lovers, there might be a cooking class from the chef of a well-known restaurant.
Of course, there are plenty of ways to blow it when choosing an activity, even when you're being completely genuine. Mistake No. 1 is not knowing yourself well enough. Oechsli tells of an advisor who was an avid runner in college, but who had hardly laced up his shoes since then. When a client invited him on a 10-mile run in order to introduce him to a friend and prospective client, his pride forced him to accept - unfortunately. The advisor "almost killed himself, and it didn't leave a good impression," Oechsli recalls.
Mistake No. 2 is not knowing the client well enough. One advisor, who set out to create a memorable wine-tasting event, got himself fired after inviting a client who was a recovering alcoholic, Oechsli says.
And then there is the threat that the activity may take up too much time and detract from your business. "We've seen that if advisors spend too much time climbing mountains, or training for the Ironman, it has a negative impact," Oechsli notes. "Today's affluent don't want someone who is supposed to be overseeing their financial affairs spending three months in the Himalayas."
Potential pitfalls aside, for most advisors investing in an outside activity is far more preferableand much more rewardingthan grinding away at cold calls or a similarly anonymous activity.
"Our research is very clear that today's affluent want to know their advisor on a personal level, because trust is so fragile," Oechsli says. "Getting into your passion pointsbe they golf, boating or whatever else you chooseis a way to connect with them."
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